PDA moots legal proceedings against 86 pharmacy Cos in employment dispute with former LloydsPharmacy staff

The Pharmacists’ Defence Association (PDA) has begun conciliation with 86 pharmacy companies to safeguard the interests of former LloydsPharmacy pharmacists. The Advisory, Conciliation and Arbitration Service (Acas), a government agency, serves as a mediator between companies and employees to resolve disputes. If the ongoing mediation prove unsuccessful, individual employees retain the option to file claims in the employment tribunal, the PDA has said.

The ongoing dispute centres around employers potentially failing to conduct the required consultation under the Transfer of Undertakings (Protection of Employment) regulations (TUPE) with employees and their representatives during employee transfers, the PDA said.

The TUPE legislation, known for its complexity and technical nature, applies when a section of the company, like a pharmacy sold as an asset using standard disposal, undergoes a transfer.

According to NHS England's recent pharmaceutical list, LloydsPharmacy has either sold or shuttered 461 branches since September 2022. According to NHSE data, as of June 30, the pharmacy chain operates approximately 512 pharmacies in England. This positions it as the third-largest chain after Boots UK and Well Pharmacy.

Implying TUPE protection

According to the PDA, the TUPE regulations have a singular objective: to safeguard and uphold employees' rights amidst changes in ownership and identity of the employing business.  In the process, both the current and new owners must engage in consultations with employees and any recognised trade union.

“LloydsPharmacy opted to divest a portion of its pharmacy network through share sales involving a series of newly established subsidiary companies collectively referred to as NewCo's,” the PDA found. However, “In cases of pharmacy disposal via a NewCo share sale, TUPE may not be expected to apply because there should be no change in the identity of the NewCo.”

The Union said the NewCo share sale process involves the transfer of selected pharmacy branches and their respective employees to each NewCo. “These entities are then sold by LloydsPharmacy to a purchaser. Some widely recognised community pharmacy businesses have become the new owners of pharmacies acquired from the LloydsPharmacy estate,” the PDA noted.

After the sale, the pharmacy staff remain employed by the NewCo, while the company itself is solely owned by the purchaser and is no longer part of LloydsPharmacy. 'LP North Seven Ltd' serves as an example of a NewCo name, and numerous similarly named companies have been established and registered with Companies House by LloydsPharmacy, it further added.

Pharmacists' transfer apprehension

PDA Union General Secretary Mark Pitt conveyed the concerns of former LloydsPharmacy pharmacists who have experienced transfers through the NewCo share sale processes.

"In a standard share sale transfer, there should be no substantial changes for employees, as the business's identity remains intact,” Mark said. “However, we're hearing from some former Lloyds employees that reporting structures, salary arrangements, supply chains, SOPs, and various other aspects have all undergone alterations. This implies a transfer, which should have been safeguarded by TUPE, may have already taken place.”

Legal experts consulted by the PDA suggest that the reported alterations in working practices by certain members imply that the transfers that have taken place should have been covered by TUPE from the outset. In light of this advice, the Union has taken the initial legal steps to safeguard the interests of its members, the PDA said.

In cases of a TUPE transfer, if an employer intentionally or inadvertently neglects to conduct individual or collective consultations through a recognised trade union, an employment tribunal has the authority to grant affected employees compensation of up to 13 weeks of gross pay. To date, early conciliation has been initiated against both LloydsPharmacy, 63 NewCo's, and 22 buyers, the Union added.

In June, the PDA told Pharmacy Business that Hallo Healthcare's decision to close over two hundred pharmacies has far-reaching implications, affecting not only patients and communities but the entire sector. Paul Day, Director of PDA Union, had said that the closure of 237 LloydsPharmacy stores represents a significant loss, removing "over 1 per cent of the entire UK community pharmacy branch network at once."